10 Business Lessons From David Geffen
A weird fascination of mine is biographies.
Specifically I seem to like biographies of businesspeople and rock stars.
Mostly books, but also documentaries and interviews.
As a side note, I’ve watched The History Of The Eagles on Netflix 3 times and I was just thinking that I could probably watch it again.
It’s like 5-6 hours long…
Anyway, the most recent rabbit hole I’ve been going down has been the biography of David Geffen.
I remember his name from my childhood and Geffen Records. I also remember DreamWorks SKG, which was his film studio with Spielberg and Katzenberg. I think Geffen’s been out of that for a decade now, though.
Anyway, David’s story is unique. He grew up in New York. Admired his mother’s work ethic (not his father’s).
He wanted to get into the film industry. His heroes were the studio big wigs. He lied his way into a talent agency. Then showed his work ethic and talent and earned promotions.
Eventually he moved to LA to work in the music industry with artists. He was a millionaire in his mid twenties after working to help songwriter Laura Nyro’s career get off the ground.
From there he started Asylym Records, whose biggest act was the Eagles (there’s the connection). And things went up and up from there.
So that’s the intro.
Here are some key lessons from David Geffen’s life.
So all these are pulled from reading books, watching interviews and a few documentaries.
In one of those interviews Geffen mentioned “infrastructure”.
It was in reference to DreamWorks. The company was a major undertaking and launched in 1994. For the first few years many thought the company was likely to fail.
Geffen pushed that analysis aside. He talked about how the company was setting up and incredible infrastructure.
So after the company really found its stride with some major successes in the movie industry.
The entire operation of the business.
Laying out all the tasks that need to be done. Hiring people to do them. Processes for hiring the right people. Feedback loops.
All of it.
It’s not something that’s discussed often in business, but without it a business is very likely to fail.
Infrastructure could be seen as the boring part of business, but I think really successful people thrive in it. And I think David Geffen appreciated infrastructure and liked using it to his advantage.
Throughout his career, Geffen sought out mentors and partners.
In his early days he sought advice from record label executives. Then movie executives.
He partnered with Laura Nyro, a great singer and songwriter, and together they made millions with her music. She writing and performing and David managing and promoting.
Geffen had a partner in his first talent agency, Elliot Roberts.
He partnered with Atlantic Records when he launched Asylum.
He partnered with Warner Bros. for Geffen Records.
He partnered with Spielberg and Katzenberg for DreamWorks.
Geffen probably has and could accomplish a great deal on his own. But he recognizes the value in partnerships.
3. Personal Relationships
One of the keys to David Geffen’s business prowess is personal relationships. He’s said to have been a guy always on the phone. Always checking with people. Having conversations. Discussing interests. Getting to really know people.
He’s said to be a really great friend (unless you cross him).
Geffen would build his personal relationships throughout his life. And on occasion he’d use those relationships to help him in the business world.
However, he seemed to value the relationships a great deal and gave just as much, if not more, than he asked for.
David Geffen didn’t seem to hold things back. He didn’t seem to play games when he wanted to make his point known or when he had something to get done.
Being direct with people can come off as tactless, but Geffen was all about getting things done. And he often did and inspired others to as well.
5. Trust Until They Prove Your Wrong
One of Geffen’s big tenets that he seemed to strive for was to give people the benefit of the doubt. He would trust you until you proved him wrong.
That’s a good way to live life. Everybody has something to offer. Don’t go into a relationship thinking that someone is trying to screw you over.
They may very well be and you might get burned once.
But if you leave yourself open to things and open to relationships and opportunities you’ll win much more than you’ll lose.
6. Go After Big Markets
Geffen, in a more recent interview, said that he wouldn’t go into the music industry today. He would much rather go into something that’s big and growing right now. Something like what Google, Apple and Facebook are doing.
If you have big dreams then go after big markets. See what the big markets are right now and see where the gaps are. Fill in those gaps and you’ll find success if you try hard work.
Obviously it’s not easy, but it’s possible.
Geffen saw opportunity in the music industry. Then he saw opportunity in the film industry. Then he retired.
7. Focus On The Biggest Profits (computer animation)
One interesting thing Geffen spoke about with DreamWorks was that they kind of tried all kinds of movies to start. Then they realized that computer animated movies were in high demand and really profitable.
Shrek was a DreamWorks creation.
After realizing the success in this area Geffen steered things there. Not entirely, but that’s where a big focus went. Along with other high budget CGI films. Spielberg’s bread and butter in many instances (Minority Report).
Steve Jobs was famous for this approach as well. Focus on what’s profitable. Cut the rest.
Lego also went through something similar. They got bloated. Tried too many things. They only turned around when they cut back to the core.
8. Trust Your Team
Geffen sold Geffen Records in 1990 for $550 million.
The timing was interesting. Mostly because Guns ‘N Roses were preparing to release their next project. The followup to Appetite For Destruction.
GNR had become the biggest band in the world in mid to late 1988 and into 1989 and 1990.
In the 1970s, Geffen recognized talent and signed artists to Asylum. But the second half the ’80s he trusted his A&R team to bring in the talent.
Tom Zutaut brought him GNR. The band struggled for a year and Zutaut went straight to Geffen to convince him not to give up on the band. Geffen trusted him and called in a favor to MTV. The station played GNR’s Welcome To The Jungle and things took off from there.
Geffen trusted people around him. That’s not easy to do. Many entrepreneurs want complete control, but that approach just can’t work. Not at scale.
9. Better Early Than Never
Geffen sold Asylum Records in 1972 for $7 million.
He talks about it and realizes he could have made more, much more, had he sold it a few years later. But he doesn’t seem bitter.
Well, $7 million was an incredible amount in 1972. And still today. Why not take the opportunity while it’s there?
At least if you sell early you’re eliminating risk in the future. Asylum could have done great things in the future, but it could have tanked. Geffen took the bird in hand.
Contrary to popular belief, businesspeople are very risk averse. They like low risk, high reward opportunities.
And they’re not afraid to sell early vs. late.
10. Make Your Own Rules
One thing that seems to be a trait of successful people is that they aren’t afraid to make their own rules.
Geffen’s career began because he lied on his resume to get a job.
It turned out to be a win-win for him and for the company he worked for. He worked his butt off for them.
Sometimes life’s rules don’t make sense. If you ever find that to be the case or if you see something being done just because it’s “always been that way”, see it as an opportunity.
An opportunity to go your own way.
I know that David Geffen may not be a perfect human. But who is?
I admire his great qualities and especially his business acumen. He truly seems interested throughout his life to discover more about himself while trying to become a better person.
He might be retired now, but I wouldn’t bet against him still doing great things with the rest of his life.